Blockade Teaches Lithuania Lesson About Dependence

By
Thomas Stauffer, Thomas Stauffer is adjunct professor at Georgetown University in Washington. /
May 3, 1990

WASHINGTON

ENERGY supply is the Achilles' heel of Lithuania. Its leaders appear to have grossly miscalculated their republic's energy vulnerability when they declared independence from the Soviet Union on March 11. It is now clear that Moscow's economic leverage is all but total. Soviet rule paradoxically had benefits: It provided economic protection in the form of very cheap energy and guaranteed markets for goods unsalable elsewhere.

The lesson is proving to be doubly painful. First, Lithuania's economy is grinding to a halt because the Soviets control all oil and gas and effectively almost all of the electricity. It cut off oil and most gas supplies on April 19.

According to Department of Commerce officials, the oil price was 30 rubles per ton, or less than $4 per barrel at current exchange rates. Electricity rates purportedly averaged one-quarter to one-tenth those in the US, depending upon the exchange rate.

Upon Lithuania's achieving independence, the Soviets will demand ``real prices paid in real money,'' just as Eastern European countries are now being forced to pay.

Lithuania's financial resources are all but nil. ``Nothing really large-scale is in the works,'' states a spokesman for the largest Lithuanian-American relief organization.

Prospects for export into world markets are limited. Lithuania's meat and dairy products and industrial goods are prized in the Soviet Union - by default. Alternative outlets are improbable.

A recognized independent government of the Republic of Lithuania would have legitimate claims on gold reserves deposited in France and Switzerland prior to the occupation of Lithuania by the Soviet Union in 1940, according to attorney William Huff of New York, a legal adviser. But these add up to less than one month's oil bill.

Gold assets in the United States are also unavailable. They were converted into US bonds, the interest of which is dedicated to supporting the few remaining Lithuanian legations.

There is one possible claim for some $200 million, plus interest, from the British, which Mr. Huff said ``in 1968 traded away Lithuania's gold reserves held in London against [Britain's] own long-standing claims'' against the Soviets.

Any measure of ready cash, however, is dwarfed by the annual ``energy deficit,'' which Dr. Albina Tretyakova of the Department of Commerce estimates at $1.2 billion. It may be closer to $2 billion, after full adjustment for all energy subsidies.

All of Lithuania's energy supply but local hydro plants is in Soviet hands. Alternative delivery is difficult, if not impossible. Stasys Lozoraitis, charg'e d`affaires in Washington of the Lithuanian legation, says that Soviet troops have seized the port of Klaipeda, which in any case has only a small oil products export terminal which would need to be reversed for imports.

Troops have also occupied the large 3,000-megawatt Chernobyl-style nuclear reactor station at Ignalina. The plant belongs to the Ministry in Moscow, not to Lithuania, and the power could readily be diverted in toto back into the Russian electricity grid.

The major electric station at Elektrenai, near Vilnius, is fueled by Soviet oil. Even the fertilizer plant at Jonava, vital for Lithuania's thriving agricultural sector, depends upon subsidized Soviet feedstock.